Welsh Labour MP defends Chancellor’s decision to rule out wealth tax
A Welsh Labour MP, regarded in some quarters as one of the rising stars of the new intake, has defended Chancellor Rachel Reeves’ decision to rule out a wealth tax against the richest.
Swansea West MP Torsten Bell, a former Treasury official and chief executive of the economic think tank Resolution Foundation, said a wealth tax would not raise “significant revenues”.
Ms Reeves has previously rejected calls for a tax on the country’s wealthiest even though she has claimed there is a £22 billion black hole in public finances.
Supporting the Chancellor’s position, Mr Bell said it was not helpful in the wealth tax debate to compare the UK with the US, as the US has far more billionaires.
‘Fashionable’
“On the tax side it is very fashionable on the left to say ‘let’s just have a wealth tax’,” he said.
“For some of us who have spent 20 years working on tax policy, I think that is something that is exciting for them to write in books and not very useful in terms of helping govern the country. There are two reasons why that is.
“The short reason why that doesn’t work in the UK is two words, Jeff Bezos. He does not live in the UK.
“And, yes, we do have some very rich people. But our wealth is nowhere near … we don’t have the globally rich people that the US, particularly, has lots of.
“You will have a brand new wealth tax and you are not going to bring in really significant revenues in the UK.
“Secondly, doing it is really hard. I am fed up of people saying Government should do this then not getting remotely interested in the hard job of getting homes built… taxes that actually raise money.”
Director of policy
Mr Bell, who was elected in July and was the Labour Party director of policy under Ed Miliband’s leadership, also criticised successive Conservative governments for failing to deliver.
“There has been enough game play over the 14 years,” he said during an event at the Cheltenham Literature Festival to promote his new book, Great Britain? How We Get Our Future Back.
“It’s hard to do, and if you can’t overcome the hard job of doing it well, so it is just a bit of virtual signalling, I’m afraid you can get stuffed and shouldn’t be in politics at all.
“It does matter when things are hard. That’s why for 14 years the Tories promised to build homes and didn’t.
“I’m fed-up of politics of the like of Nigel Farage, who says it is easy. That was also the problem with Boris Johnson – boosterism – saying Britain is a world beater is the way we make it a world beater.
“We have got to get serious and grow as a country, doing the nitty gritty and actually do things.
“If you want to grow taxes on the wealth side we have got a lot of wealth taxes already, like inheritance tax, capital gains tax, stamp duty.
“Sort out those taxes is the first way you officially start taxing wealth, stop dreaming of your wealth tax because you are just going to waste years.
“I have spent 20 years in this business. In the middle of the last decade, I watched the left wander off for years discussing the value of the universal basic income and how robots were going to take all our jobs. That was fun for them at their conferences.
“There was no investment happening in Britain, we didn’t have any robots happening at all.
“There is no plausible way of delivering universal basic income and at the same time poorer households have seen the poverty rate go up.
“How about we actually focus on what’s happening rather than what you enjoy talking about?”
‘Tough decisions’
Ms Reeves is due to deliver her first Budget on October 30 and used her conference speech last month to warn of “tough decisions”, but rejected a return to austerity.
“Yes, we must deal with the Tory legacy and that means tough decisions, but I won’t let that dim our ambition for Britain,” she said.
“So, it will be a budget with real ambition, a budget to fix the foundations, a budget to deliver the change that we promised, a budget to rebuild Britain.”
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Pensioners are an easy target for Labour – so they think!
There are only two ways to make Johnson’s wellard Brexit work. One is mass non-European immigration. The other is to reduce the huge burden retired people put on the economy. The Cons chose the first option because so many of their voters are retired. For Labour, mass immigration is more important to their voters. And to be fair, over 65s were the only demographic to back Brexit with a supermajority. As long as they look after the least well off coming for the olds is the least worst route to Brexit success.
I’m neither over 65 nor a Brexiteer, but a shocking fact that I believe came out recently is that a higher proportion of over 65’s pay tax than under 65s. A generation who’ve done their bit and saved to support themselves, effectively subsidising people of prime working age who evidently have no desire to work or contribute to society.
25% are millionaires according to the Telegraph. And someone has to pay for Brexit.
You refer to him as a ‘Welsh’ Labour MP? I thought he was parachuted in. Also he only seems to talk about Britain rather than Wales.
What was or is his connection to Labour exactly?
Ed Millibands director of policy 2010-15, then CEO of thinktank Resolution Foundation a left leaning organisation.
‘Welsh Labour MP’ is obviously shorthand for an MP in a Welsh constituency, don’t be picky…
‘Welsh’ means ‘outsider’, so it describes him well, though he’ll never be regarded as from Cymru.
If he’s smart he’ll make sure policy works for Wales before proposing it for the UK. The only route to growth is by boosting all the regions and nations so they all make a bigger contribution to the UK economy. The days of only worrying about London and drip feeding crumbs from their success to the rest of the so-called union must be over.
Wales’ MP’s are under strict instruction to mention UK, Britain. Their job is to keep the UK (or what’s left of it) together at all costs. Beware of anyone with a knighthood , they are just as bad. Be true to yourself and ask why Cynru remains in a poor state after 50 years despite different governments? Isn’t it time trust Plaid? 🏴❤️🏴
While I am loath to admit it I have to agree with him on this. A wealth tax would be very inefficient in the UK as so much of the wealth is not held here in the UK and would need updating yearly with long accounting arguments as to the exact value of assets, far more efficient is restricting reliefs and allowances – see Richard Murphy’s Taxing Wealth Report from June this year – https://taxingwealth.uk/
A land value tax wouid probably be better. That is one asset you cannot hide or take out of the countryside
Yet another apologist for the “squeeze the poor, protect the super rich” Labour Party. They claim socialist roots, now looking more like national socialists, you know, the sort Adolf organised !
It’s smarter to focus on fairness than wealth. When Mr Sunak pays an effective tax rate ten percent below Mr Starmer, it’s clear there’s a fairness gap to close. It’s much harder for the right to weaponise a message of fairness than a message of punishing wealth.
So he thinks UBI is a non starter what’s he doing in Wales where WG are running a pilot. He was same about 2 child cap, wrote a big policy doc on dropping it then towed line for a Welsh seat.
Starmer starting to lose elections, 11 councillors since Sept 16th in by-elections.
Britain’s super rich are allowed to hide their wealth in tax havens overseas. This can be, and should be made illegal. Just as a UK citizen can be stripped of nationality for marrying into ISIS these people should have the choice of keeping their wealth in UK or losing their UK citizenship and being banned from entering UK again. It can be done and should be done.
This takes global cooperation. The EU was gunning for the aggressive tax avoiders which is why the super rich sponsored Brexit.
good point
While I agree, it will never happen as the UK overseas territories aka tax havens are central to how the City of London now works recycling money and making massive profits.
As I have said:
We need our own financial system.
We need The Cymru sovereign wealth fund as Norway created from their Oil revenues.
We have this opportunity with wind, solar and tidal power.
It does help when your Labour government is holding onto our coasts with their ‘crown estates’ ?????
Cymru must have control of its coasts, land and have its sovereign wealth, financial and tax system accountable to our Senedd.
Cheltenham Literature Festival! That is his natural home as he’s a fish out of water in Swansea. This guy is an ultra-Loyal who will not rock the Labour Brit Establishment boat under any circumstances. A future Chancellor of the Exchequer who will pump money into the M25 bubble. When will people in Swansea and across Wales wake up?
If London Labour don’t rock the boat they’ll leave the coast clear for the libertarian extremists living in the past to take back control in five or ten years time. Blair’s second biggest mistake after Iraq was leaving SW1 wide open for their return instead of completely and irreversibly modernising government, the economy and the constitution so it was unrecognisable to the relics of the 19th century.